news WORTHINGTON -- The Worthington City Council agreed after extensive discussion Friday to an effective tax rate increase of 4.3 percent for the 2012 fiscal year.
The 2012 precertified tax levy has been increased by 11.9 percent, but is tempered by a decertification of TIF District 7 and thereby impacts...
Worthington, 56187

Worthington Minnesota 300 11th Street / P.O. Box 639 56187

2013-07-11 16:15:14

WORTHINGTON -- The Worthington City Council agreed after extensive discussion Friday to an effective tax rate increase of 4.3 percent for the 2012 fiscal year.

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The 2012 precertified tax levy has been increased by 11.9 percent, but is tempered by a decertification of TIF District 7 and thereby impacts on current property owners.

The precertified levy figure is the limit that the city's tax levy for the following year cannot exceed. If the 11.9 percent increase is used, the total levy would represent an increase of nearly $328,000 from 2011's $2.8 million.

In addition to the TIF District 7 decertification --which increased the levy by 7.6 percent -- a decrease in Local Government Aid (LGA) by about $325,000 and a loss in market value credit of $204,000 contributed to the 11.9 percent figure.

Severe state cuts in LGA and market value credit initially could have meant up to a 20 percent increase in the levy, should the city have opted to make up the difference strictly from tax revenue.

"We knew that wouldn't be feasible to our taxpayers and constituents," City Administrator Craig Clark said.

Funding of the Equipment Revolving Schedule (ERS) with proceeds from the sale of Worthington Regional Hospital to Sanford Health gave a boost to the street overlay fund, and freezing city employees' salaries was another example of an effort made to cushion the levy increase. Each departmental budget was either cut, kept flat or had a very minor increase, Clark said.

"At some point, we will be giving pay increases again because if not, I'd want to find a foxhole or a bunker (for myself)," Alderman Ron Wood said.

"I would rather be looking on our employees' performance and wages based on what the market is as opposed to the woes of the state," Alderman Lyle Ten Haken added.

Council members will officially approve the precertified levy at its regular meeting Sept. 12. The council can reduce the total levy if it so chooses at its Dec. 12 meeting.